Anatomy of a Fund-Raising Scandal

WASHINGTON
— In the past five months, the White House has been dogged by questions about campaign fund-raising tactics.

The questions have focused on two related points: the activities of Democratic National Committee fund-raiser John Huang and the propriety of President Clinton conducting fund-raising kaffeeklatsches in the White House.

Four separate investigations are underway: by the Justice Department, the Federal Election Commission, the House, and the Senate. Mr. Clinton has tried to temper the growing scandal, in part by urging Congress to pass campaign finance reform.

John Huang is at the center of the fund-raising scandal now dubbed "Asiagate." Mr. Huang raised at least $3.4 million for the DNC, focusing on the Asian-American community. The DNC returned $1.3 million after news reports questioned whether the money was raised illegally from sources overseas. The DNC suspended Huang on Oct. 18.

Prior to becoming a Democratic fund-raiser, Huang worked as an executive with the Lippo Group, a financial conglomerate with investments throughout Asia and the US.

Investigators want to know whether in his zeal to raise money for President Clinton and the Democratic Party, Huang broke federal-election and other laws.

Among unanswered questions:

* Were illegal campaign contributions made by foreign governments such as Taiwan and China, nations competing for influence with the Clinton administration?

* Were contributions accepted from the Lippo Group or other Asian businesses and then funneled through third parties to disguise their origin?

Election laws ban contributions from any foreign sources. As a result, if a fund-raiser was prone to accept illegal contributions, he or she would have to launder the money to make it appear as if it came from legitimate US-based donors.

At a fund-raiser held last April at a Buddhist temple in California, a member of the temple was handed $5,000 by an unidentified person who asked the member to donate it in her own name to the DNC. Huang organized the event.

The vice president of the Asian American Business Roundtable in Washington says Huang asked him to channel $250,000 to the DNC disguised as contributions from the group's members. Huang has denied making the request.

Investigators are also looking into reports that a Taiwan official offered to donate $15 million to the DNC, and that the Chinese embassy in Washington may have tried to channel illegal campaign contributions to the Democrats.

In addition to these concerns, the role of Clinton friend Charles Trie is also in question. Mr. Trie has links to Huang and the Lippo Group and has made substantial contributions to Clinton's legal defense fund. Trie delivered two envelopes containing $639,000 to the fund in early 1996. The money was rejected, and the Justice Department is investigating the source.

Presidential Coffees Attract Money, Questionable Visitors

President Clinton's "kaffeeklatsches" have raised a lot of money. These informal talk groups have also attracted some questionable visitors to America's most hallowed home.

*Charles Trie used his pull with fellow Democratic fund-raisers to get a Chinese arms merchant, Wang Jun, into a meeting with Mr. Clinton.

Mr. Wang is chairman of a Chinese company that exports Chinese missiles and other weapons systems to developing countries. The US has been critical of China's arms sales, particularly supplying missiles to Iran. In addition, officials from one of Wang's companies were among 14 indicted in May in California for an alleged scheme to smuggle 2,000 automatic rifles from China into the US.

*After giving $20,000 to the Democratic Party in November 1995, Miami resident Jorge Cabrera was invited to a pre-Christmas event at the White House. A month later, Mr. Cabrera was arrested in a Miami drug bust that confiscated 6,000 pounds of cocaine. The DNC returned the $20,000 in October 1996.

*Also present at a 1995 Christmastime White House meeting was Eric Wynn, a New Jersey stock promoter who had been convicted earlier that year of carrying out a securities fraud that benefited a capo in the Bonanno crime family. The Washington Post reported that Mr. Wynn was free on bail pending his appeal at the time of the kaffeeklatsch.

Administration officials have pledged to adopt more strict security procedures to screen guests invited to the White House.

Coffee Talk

The DNC has collected $27 million from 103 presidential coffees held from January 1995 to August 1996. Aside from the above embarrassments, critics also say such events create an appearance of government for sale. Here are some contributions:

* Frank Newman, CEO of Bankers' Trust Co. of New York, attended a coffee on May 13, 1996. Two months later, his bank gave the DNC $75,000.

* Robert Elkins, chairman of Integrated Health Services, attended four coffees in 1995 and 1996. Within five days of each, Mr. Elkins wrote checks to the DNC ranging from $50,000 to $75,000.

* One week after attending a coffee, two partners at the New York investment firm Goldman-Sachs each wrote $100,000 checks to the DNC.